v7 n2

Section Review

Is probate relevant?

By Mark A. Leahy

Mark Leahy practices with the firm Whittum & Leahy in Quincy where he focuses on trusts and estates.

The proposed Massachusetts Probate Code, when adopted, will result in a number of procedural changes to the manner in which the probate practitioner and the Probate and Family Court manage estate administration cases. The potential impact of the changes on the practice of law and court personnel workload is a complicated issue. This article will examine the changes in general and their impacts.

The present probate procedure in Massachusetts follows the ancient formal, otherwise known as solemn form, probate practice. Under this process, probate of decedent’s estates is predicated, at least at the outset, on the court controlling the process. No executor or administrator may be appointed in less than one month. Recent experience shows that due to limited court resources and increased pressure from family matters, the opening of probate can take much longer and vary greatly from county to county.

The protections against mismanagement or fraud readily available in the Probate and Family Court should be seen as an attractive lure for submitting to probate. Instead, the increasing delay and expense of the probate process is now perceived by the public to be the penalty for failing to plan one’s estate. A fast, efficient probate process after death and retention of complete control of assets during life should be seen as a reward for observing the formalities of will making. However, now clients come to us already primed to seek probate avoidance. How often have we met with a client seeking a trust just to avoid probate with no inkling of any need to deal with issues of asset management, incapacity, estate taxes, etc?

Formalities of execution and delay of probate drive the populace toward non-probate transfers, increasing the risk of loss of control of assets during life and likely unequal sharing of assets after death. Will making was once the only focus of estate planning. Now avoidance of probate is a main objective. If the undesirable aspects of probate can be ameliorated, people may come to rely on simple wills and the protection the court affords. One result will be less need of empowering others to have ready access to the client’s assets, thus putting them at risk to unscrupulous activities.

The American Association of Retired Persons (AARP) promotes a policy that states should adopt “probate procedures that simplify, expedite and reduce the costs of settling estates in probate,” The Policy Book: AARP Public Policies 2002, ch. 13. The National Probate Court Standards adopt a similar position. “Absent a need for probate court supervision, the interested persons should be free to administer an estate without court supervision,” National Probate Court Standard § 3.2.1. “This standard adopts the general view that court approval of every step in estate administration is not cost-effective and should be abandoned.” Comment, Standard § 3.2.1. Such less intrusive involvement by the court, while satisfying the desires of estate beneficiaries, should also ease the workload of court personnel responsible for processing probate documents.

Such a policy calling for unsupervised administration is not a modern phenomenon. In ancient England, it was called probate in common form, in which an executor would prove a will before the ordinary upon his own oath. Blackstone’s Commentaries, Vol. II, Chap 32. Only in case of a disputed will would solemn form probate be necessary. Even now, many states permit both common and solemn form probate, though they may be called informal and formal probate.

Informal (common form) probate authorizes quick appointment of a personal representative with full powers while leaving the will, testacy and appointment open to being contested by any interested party. Some states prevent informal probate until after a minimal waiting period designed to permit time for anyone anticipating a dispute to first initiate a formal procedure. In a formal (solemn form) probate, appointment is delayed, as in Massachusetts, until after notice to all parties, hearing of any disputes and entry of a final judgment.

Thirty-five states authorize informal or common form probate. Sixteen of these follow the Uniform Probate Code procedure. Twenty-five states allow informal probate with no prior notice to interested parties.

The proposed Massachusetts Probate Code sponsored by the Massachusetts and Boston Bar Associations would add an optional informal (common form) procedure by which, soon after a death, a personal representative could be appointed by a magistrate. The magistrate would be an individual designated by the court, such as an assistant register, to examine and accept a petition. No further court action would be required, unless requested by an interested party, until a filing informing of a closing of the estate. The vast majority of estates could avail themselves of the opportunity to obtain a quick appointment so as to proceed with estate administration without delay. Inventories and accounts would not have to be filed for public record if provided to all interested parties. If thought necessary, a final adjudication of heirs, testacy or any other matter could be obtained during a formal process for allowance of accounts. Those interested in first obtaining a judgment determining testacy or identifying heirs could proceed in the old manner, formal probate.

The election of either course of action, formal or informal, is initially up to the petitioner and interested parties. “Overall, the system accepts the premise that the Court’s role in regard to probate and administration, and its relationship to personal representatives who derive their power from public appointment, is wholly passive until some interested person invokes its power to secure resolution of a matter. This chapter, through the Court, provides remedies which are suitable and efficient to protect any and all rights regarding succession, but refrains from intruding into family affairs unless relief is requested, and limits its relief to that sought.” UPC Article III, general comment.

The immediate impact of informal probate on the court would be elimination of a need to:

• Issue and mail citations after petition filing;

• Docket and file returns of service;

• Prepare judgments and present them to justices for review;

• Process inventories and accounts;

• Docket each filing and judgment; and

• Store multiple documents in perpetuity.

The time saved in processing estate documentation could be spent on other matters. It should be noted that none of this presently required additional paperwork generates any filing fee revenue.

The significance to the court of the time saving is magnified when measured by the relative number of court filings devoted to estate matters. Estate, trust and guardian (probate) matters generate only 19 percent of filings, but 64 percent of fees received annually for the Probate and Family Court. The remainder are domestic relations, equity, change of name, adoption and paternity actions. Estate and trust matters generate fully 73 percent of all probate matters filed on an annual basis, the remaining 27 percent being guardianship filings. Probate and Family Court Department, Annual Report Statistics, 1999-2002. Thus any significant reduction in paperwork in this area of proportionately large fee generating volume should have a dramatic savings impact on personnel resources.

The numbers reinforce the trend. Not so many years ago probate matters outnumbered family and other matters by the reverse proportion. The drain on court resources has exacerbated the delay in opening probate of an estate giving fuel to the fire of probate avoidance.

A likely long-term impact of the proposed code will be an increase in the number of informal probate filings. For many years, individuals have been conditioned, even advised, to avoid probate at any cost. If the Probate and Family Court can acquire a reputation of being able to provide protection for those few who seek it without imposing delays, loss of privacy and expense to all, many individuals will stop relying on expensive and risky non-probate transfer techniques. As simple wills become an effective, inexpensive, efficient manner to transfer assets on death, more people will avail themselves of probate and retain control of their assets during life. The additional fee generating filings and the relief of processing the fewer filings generated by informal probate doubly benefit the court’s budget.

While currently an initial formal adjudication of appointment or testacy may give comfort to the executor or administrator, it also operates to bar the bringing of any controversies by one who acts too late. Under the code, an interested party will be able to complain to the court at any time and seek appropriate protections. Thus, a race to the court to seek quick informal appointment will not confer any advantage. In addition, the proposed Massachusetts code gives the formal procedure the head start by requiring seven days advance notice of any informal filing.

The availability of quick redress in case of need combined with the availability of quick opening of probate should answer the critics advocating avoidance of probate. Avoidance of probate equates with avoidance of protection for those left out of the estate planning process. The unscrupulous should not have “probate avoidance” excuse to cause an elder to enter into an estate plan that really avoids scrutiny of interested parties and avoids submitting to the jurisdiction of the court providing ready protections.

Is probate relevant anymore? With joint accounts, beneficiary designations and trusts rampant, less and less so. The convenience of each of these methods of wealth transfer must be measured against the loss of means of protection in the rare case where an interested party is wronged. The convenient transfer methods will always win out when the alternative, probate, involves time-consuming process and loss of privacy. Shorten the appointment process, protect family privacy and bring wealth transfer back to where protections are readily available if needed.